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Market Update

Wall Street Higher After Largest Heathcare Merger, Cautious World Markets


Author: Nichole Harper
ticker.com
Last Update: 11:51 AM ET November 23 2015

[11:50 AM New York City, New York – Market indexes on Wall Street traded higher on Merger Monday and resource stocks led the gainers after Saudi Arabia agreed to cooperate with other oil producers to stabilize prices. Pfizer and Allergan agreed to the biggest merger in the healthcare sector.

Stocks and market indexes on Wall Street traded higher after materials and resource stocks rebounded from a 6-year low after Saudi Arabia said it will cooperate other oil producers to stabilize prices.

On Wall Street, Tollbooth Strategy Index increased 25.91 or 0.2% to 11,054.04.

S&P 500 index rose 5.02 or 0.2% to 2,094.19 and the Nasdaq Composite Index added 18.78 or 0.4% to 5,123.70.

Crude oil in New York gained 34 cents to $42.24 a barrel and gold declined $8.46 to $1,069.55 an ounce.

U.S. Movers

General Electric Company (GE) fell 6 cents to $30.60 after the diversified industrial conglomerates agreed to sell its U.K.-based home loans portfolio of $5.9 billion to an investment consortium led by Blackstone, TPG Special Situations Partners and CarVal Investors.

The transaction is expected to close by the end of the year and terms and condition were not disclosed.

Pfizer Inc (PFE) slumped 2.8% or 89 cents to $31.29 after the biopharmaceutical group agreed on a merger agreement with the Ireland-based Botox maker Allergan Plc for about $160 billion.

The boards of directors of both the companies approved the deal on Sunday.

Under the terms, transaction is currently valued at $363.63 per Allergan share for a total enterprise value of about $160 billion, based on the closing price of Pfizer stock on November 20.

The combined company estimated to generate annual operating cash flow of about $25 billion in early 2018.

The stockholders of Pfizer will hold approx 56% of the combined company and rest of 44% will be hold by the shareholders of Allergan.

The transaction is expected to close in the second-half of 2016.

European Markets

Market indexes in Europe were overwhelmed by the six-year commodities prices and a growing consensus for the further weakening in the demand for commodities.

On the positive side, expectations for higher defence spending in the U.K. and the merger approach to Wincor Nixdorf by the U.S. rival Diebold in Germany, limited the losses.

In London trading, FTSE 100 index slumped 25.90 or 0.4% to 6,308.73 and in Frankfurt the DAX index slid 36.50, or 0.3%, to 11,083.33.

In Paris, CAC 40 index dropped 33.93 or 0.7%, to 4,877.04.

Copper, coal, and iron ore dropped to a new six-year low in London and Sydney trading and trading volumes were thin on both exchanges.

The Bloomberg Commodity Index, which includes 22 raw materials, sank 2.2% percent to 85.85, the lowest level since August 1999.

Acano Limited, the U.K.-based privately held multiple videoconferencing services provider agreed to be acquired by the U.S.-based internet networking services provider Cisco System, Inc for about $700 million in cash.

Playtech Plc plummeted 9% to 774.50 pence after the U.K.-based online gambling software and services provider terminated its merger agreement with Plus500 Ltd for £460 million, as it will be unable to obtain approval of the Financial Conduct Authority before the end of the year.

Wincor Nixdorf AG soared 5.2% to €48.21 after the Germany-based automated teller machine maker was approached by the U.S.-based rival Diebold Inc for about $1.8 billion in cash and stock.

Asian Markets

Markets in Japan were closed and observed Labour Thanksgiving Day.

Stocks in Mumbai traded lower after Asian markets declined on the China growth worries and a persistent decline in commodities prices.

Prices of copper, iron ore and coal declined to a six-year low and the rising dollar also lifted inflation expectations in the emerging market.

Rupee weakened 24 paisa to 66.42 against one U.S. dollar.

The Sensex Index decreased 49.15 to close at 25,819.34. The CNX Nifty slid 7.30 to 7,849.25.

Tata Communications is in talks with South Africa-based Vodacom SA to sell its Africa-based subsidiary Neotel.

SeQuent Scientific’s subsidiary plans to buy Turkey-based Topkim worth $7 million. Phoenix Mills said quarterly net and sales rose ahead of expectations.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc